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Two real estate agents and one agent in Michigan have filed a class-action antitrust lawsuit against national, state and local associations of REALTORS, challenging the requirement that they belong to a trade group to access local multiple listing services.
Real estate professionals’ decision to sue comes after the National Association of Realtors reached a settlement in multiple antitrust lawsuits over a rule change that professionals said would harm agents, brokers and consumers.
Doug Hardy
Aug. 12 Douglas Hardy, MD, broker and owner of Signature Sotheby’s International Realty in southeastern Michigan, which has about 100 agents and brokers; Glenn Champion, Esq., principal broker with the same brokerage ; Dylan Tent (an agent with the same brokerage) filed the complaint on behalf of all agents and brokers in Michigan who need to be a real estate agent to access the MLS.
Glenn Champion
The lawsuit, filed in the U.S. District Court for the Eastern District of Michigan, includes NAR, the Michigan Association of REALTORS, the Grosse Pointe Board of Realtors, the Metropolitan Association of REALTORS, the North Oakland County Board of REALTORS and Michigan’s largest Board of Realtors.
dylan tent
The lawsuit accuses them of civil conspiracy, economic coercion and unfair restraint of trade in violation of the federal Sherman Antitrust Act and the Michigan Antitrust Reform Act.
“Defendants’ forced membership in their organization essentially serves to hijack access to the MLS and limit access to the MLS to only those entities and individuals who pay membership fees,” the complaint states.
“In order to perpetuate the above-mentioned scheme and continue to enforce class members’ compliance with their membership requirements, Defendants have used their overwhelming economic power and market dominance to coerce Plaintiffs[.]
“Defendants further exercised their economic power and market dominance in a coercive manner by unilaterally denying Plaintiffs such as Sotheby’s Entities the option to withdraw from membership. Defendants’ extortion conduct was made more effective and enforceable by their conspiracy.”
The complaints make it clear that the Realtor membership requirements for entry into the MLS have become particularly vexing in the wake of the NAR settlement.
The NAR set an Aug. 17 deadline for the MLS to implement the deal’s rule changes, including prohibiting listing brokers from compensating buyer’s brokers on the MLS, no longer requiring sellers to compensate buyer’s brokers on the MLS, and requiring brokers People and agents enter into contracts with the buyers they work with before the buyers visit the home.
“These claims are based in part on NAR’s recent settlement of a nationwide class action lawsuit that eliminates transparency around broker compensation to buyers and limits seller options by prohibiting sellers from filing compensation, even though the MLS essentially invites brokers to persons and agents engaged in deceptive compensation practices, and Plaintiff neither agreed with the request nor believed that the request would benefit consumers or its industry,” the complaint states.
“Additionally, these changes encourage discrimination between sellers and sellers’ agents, which will negatively impact consumers, agents and brokers.”
The defendants’ actions “caused all plaintiffs as a collective group to lose their earning potential, harmed their overall businesses, and mandated that they join these associations, which no longer results in financial loss,” the complaint states.
Specifically, the plaintiffs allege that a unilateral decision to eliminate “guaranteed broker commissions” as part of the settlement “substantially undermines any value created by the mandatory membership requirements enacted by Defendants.”
“This indeed eliminates the sole purpose of the MLS system sponsored by NAR and MAR by eliminating the guarantee of indemnity between brokers,” the complaint states.
“Furthermore, while NAR and MLS argue that removing this information is in the interest of consumers, plaintiffs argue that it would be contrary to that and would create private negotiations, discord between agents and brokers, and confusion among the consumer public,” Even allowing for individual and potentially discriminatory pricing to each buyer is a fair housing violation.
“Furthermore, the requirement to join the Defendant Organization constitutes a conspiracy to monopolize the use of the MLS and creates market barriers for all real estate agents, agents and brokers who seek to enter the market but do not wish to belong to a Defendant Organization.”
“NAR advocates for a pro-competitive, pro-consumer local brokerage market,” a NAR spokesperson told Inman in an emailed statement. [also known as MLSs]local associations can choose which to offer as member benefits.
“Furthermore, NAR supports the practice changes required by the proposed settlement because they bring greater compensation transparency to buyers and sellers and protect consumer choice. NAR will defend these baseless accusations in court .
According to the complaint, Realcomp II issued a policy change in July that made the NAR’s rule prohibiting compensation in the MLS effective July 16, a month before the NAR’s deadline.
“This decision materially harms the agreed-upon compensation for all pending transactions and negatively impacts those transactions,” the complaint states.
The plaintiffs said they contacted the defendants in early 2024, and then again in June and July, requesting permission to use the MLS system while not being real estate agents, or “non-real estate agents.”[a]Alternatively, the plaintiffs ask that they be allowed to relinquish their membership in these organizations entirely.
Realcomp II, MAR and the local association all denied their requests, saying membership in all three entities “is mandatory without exception,” according to the complaint. “While NAR allows access to non-real estate agents, membership requirements must be followed in order to access the MLS.”
This complaint is filed on behalf of a class consisting of all Michigan agents and brokers who must be members of the NAR, MAR, local association of REALTORS, and/or must use Realcomp II in order to access the MLS.
The complaint seeks a jury trial, damages and attorney’s fees and costs.
Inman has reached out to the Michigan Association of REALTORS, Grosse Pointe Board of REALTORS, Metropolitan Association of REALTORS, North Oakland County Board of REALTORS and Realcomp II for comment and will update this story when a response is received.
Editor’s note: This article has been updated with a statement from NAR.
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Send an email to Andrea V. Brambila.
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